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TORONTO — Intellijoint Surgical Inc. is the kind of company that comes to mind when policymakers think of homegrown innovative success stories.

The medical device firm, founded in Canada’s innovation hotbed of Waterloo, Ont., builds a cutting-edge tool that greatly improves the accuracy of hip surgeries. Designed and launched by Armen Bakirtzian, Andre Hladio and Richard Fanson in 2010, the device ensures hip implants are precisely placed, reducing complications and the need for costly revision surgeries.

But the company is also an example of the unique challenges the country’s innovative firms face. Intellijoint spent years acquiring the licences and gaining the trust of medical professionals to take their product from proof of concept to the operating room.

“We were a little bit naive about the amount of work it takes to get a medical product from concept to reality,” Bakirtzian, chief executive officer of Intellijoint, said. “There’s a lot of work that needs to go into designing a medical device — it’s not as simple as slapping together some code and putting it on the internet. There’s a lot of safety considerations. Safety and efficacy are two of the most important pillars of a medical device.”

Having a company such as Intellijoint succeed is key to keeping Canada’s economy competitive and the federal government says it knows it. During its budget announcement last month, the government unveiled its Innovation Agenda, a new series of funding aimed at supporting business growth in Canada. Billions are being directed to help grow so-called clusters, accelerator and incubator networks and to link technology companies to global markets and expertise.

Supporting innovation in Canada has been top of mind for governments in recent years, because the country has traditionally lagged its peers in innovation. There is often talk of the innovation gap — that Canada has a culture where taking risks and being innovative are not rewarded the way they are elsewhere.

A study conducted by Meredith Page & Associates in 2014 found that Canadians feel significantly less able to contribute new ideas in the workplace than U.S. workers. The survey warned that this was leading to a widening productivity gap between the two countries.

The Conference Board of Canada notes that despite a “decade or so of innovation agendas and prosperity reports,” Canada remains near the bottom of its peer group on innovation, ranking 13 among the 16 peer countries. Innovation, the Conference Board says, actively propels the economy of a country forward and makes citizens wealthier. It notes that countries that are more innovative pass Canada on measures such as income per capita, productivity and the quality of social programs.

Julia Deans, chief executive officer of Futurpreneur Canada, said Canada can do better. Support is in place to help entrepreneurs, but where Canada lacks is in making people, especially young people, confident to become entrepreneurs. That ties into culture, where being entrepreneurial is still not encouraged in institutions such as schools, she said.

“There is a real issue that people don’t always feel they have what it takes to bring an innovative idea to the table,” she said. “If you look across the country, there’s a gap between ideas and them actually becoming reality.”

Fears of a brain drain are also always top of mind for Canada. While Deans said the situation is improving, Canada still risks losing its young bright minds to places such as Silicon Valley, which offers unrivalled access to knowledge networks and venture capital financing.

But Deans also said Canadians tend to be too fearful about losing companies to the United States. There are benefits in entrepreneurs temporarily leaving home, she said. Having an innovative economy means a diffusion of ideas that don’t necessarily have to be home-born.

“You can have an experience in California that you probably can’t get in Canada and it’s worth the experience,” she said.

“I wouldn’t be saying, ‘don’t go, we’ll do everything to keep you here.’ My counsel is, go and have that experience and then come home and do something with it.”

For companies to remain in Canada and to be successful in Canada, they need to have commercial success here and that’s very difficult for companies to achieve in our space
Intellijoint is finding fertile ground for its products in the U.S. The company’s HIP tool launched in that country six weeks ago, with sales focused in Northeast cities including Chicago and New York. Bakirtzian said volumes are “ramping up very nicely” and Intellijoint continues to recruit surgeons in the region.

The U.S. expansion has given him insight into ways he believes Canada can improve in supporting its innovative companies. “We do a great job here of supporting young companies, giving them funding, giving them incubators,” he said. “But I think for companies to remain in Canada and to be successful in Canada, they need to have commercial success here and that’s very difficult for companies to achieve in our space.”

Bakirtzian said that spending money to help firms commercialize their products would go a long way to boosting innovation and keeping talent in Canada.

“It’s no surprise to anyone that some Canadian companies don’t make most of their early money in Canada — they look elsewhere,” he said. “All this investment we make in startups will be wasted if they pick up and leave for somewhere else, because they’re not successful here commercially.”

Financial Post Article – Posted April 1, 2016

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